Buy a Life Insurance Plan in a few clicks

Now you can buy life insurance plan online.

Kotak Guaranteed Fortune Builder

A plan that offers guaranteed income for your future goals. Know more

Kotak e-Term

Protect your family's financial future. Know more

Kotak Assured Savings Plan

A plan that offer guaranteed returns and financial protection for your family. Know more

Kotak Guaranteed Savings Plan

A plan that offers long term savings and life cover. Know more

Kotak e-Invest

Insurance and Investment in one plan. Know more

Kotak Lifetime Income Plan

Retirement years are the golden years of life. Know more


Get a Call

Enter your contact details below and we will get in touch with you at the earliest.

  • Select your Query

Thank you

Our representative will get in touch with you at the earliest.

What is Fund Switch in ULIP? And ULIP Fund Switching Techniques

ULIP policy allows you to switch the investment fund during the entire tenure of the policy to help you maximize your gains through unit-linked insurance plan.

  • Jul 15, 2022

ULIP or Unit Link Insurance Plan is the type of plan that offers dual benefits of insurance as well as investment to the policyholder. It is an ideal strategy for all those who prefer meeting their life goals and mitigating any investment risk. With the help of the ULIP fund-switching technique, you can easily manage your investment returns for higher gains. In addition, with increased market volatility, you can easily move your investment from one fund to another that suits your needs.

If you wondering how fund switches in ULIP occur or what the benefits are, then you are on the right page. This article provides in-depth detail regarding fund switching in ULIPs.

How does ULIP Fund Switching Technique Work?

You can find numerous fund options available on ULIP ranging from equity, debts etc., to invest in depending upon various factors like risk appetite, life goals, age and many more; you can choose the best funding option for yourself. In the future, if you are unsatisfied with the returns or want to shift to some other funds because of market uncertainty, you can easily switch under these circumstances.

You have the option to either partially or completely transfer the investment fund. Initially, the policyholder gets a limited number of free fund switches in ULIP, but with the exhaustion, you will have to pay a fund switch charge to transfer the units.

Benefits of ULIP Fund Switch

ULIP fund switching technique is one of the ways to gain profits in the long run, as it allows you to switch between funds. Below mentioned are some of the benefits associated with switching funds in ULIPs:

Risk Appetite-Based Investment

When it comes to investing money in some funds, most investors have a certain risk appetite. However, your preference for risk and return might change over a time interval. This is where the ULIP fund switch helps you! If your risk appetite is expected to change, you can easily apply for the ULIP fund-switching option.

Investing According to Life Goals

Our life goals and financial responsibilities keep on changing with different circumstances. The fund switching will help you to manage the investments based on your long-term goals.

No tax applicable

Apart from the charges that your insurer applies to provide you with the fund-switching facility, there is no tax applicable to it. However, it will be applicable to the maturity benefits if the annual premium is not more than INR 2.5 lakhs.

To get the best from ULIP fund switching, it is advisable to track the performance of your investment.

Types of ULIP Fund Switching Techniques

Generally, there are two fund-switching techniques that are mentioned below:

Life Stage-Based ULIP Fund Switching Technique

This technique works on the principle that the risk appetite of an investor purely depends upon which life stage they are in. Therefore, many youngsters tend to have a higher risk appetite as they can afford to take risks. However, with time or as you grow older, it is highly advisable to switch from equity-oriented funds to debt funds which are low-risk in nature. These fund-switching techniques suit your life stage and earn lucrative returns.

Fund Switching to Maximise Profit

Here, the switching of the funds depends on the market performance. The policyholder must be very careful while using this technique, as market fluctuations are quite unpredictable. To maximise the gains from the policy, you must have a good understanding of the fund pattern and the share market./p>

When is the Best Time to Switch?

The market usually goes through ups and downs, which creates uncertainty in the minds of investors. But, now, with the ULIP fund switching technique, an investor can easily cut their losses if they are not satisfied with a fund’s performance or want to switch to safer funds if they foresee a drop in the market. You can make switches according to your life stage or personal financial goals. Once you start picturing your investment goals, you can switch to low-risk debt funds and secure your capital.

What are the ULIP charges for switching funds?

You invest in numerous kinds of equities, debt, and balanced fund options in the ULIP’s investment component. There are four to five funds invested in each ULIP. Your risk tolerance and financial objectives will determine the optimal ULIP fund investment for you.

You must monitor your ULIP fund performance over time through the Net Asset Value (NAV) stated by the insurer periodically in order to make sure the ULIP policy fund move works in your favour. Additionally, the insurer will provide you with full information about the ULIP charges, fees, and any other costs associated with the fund move at the time of investing.

As a ULIP is a long-term investment strategy, only a small number of fund switches are typically advised annually. A minimum fee of ₹100 is levied for each extra Switch.

Some Ground Rules To Switch Funds Effectively and Maximise ULIP Returns

1 . It is advisable for you to initiate your ULIP plan by investing in debt funds since they are less risky and assure steady returns on investments.

2. Keep your debt funds intact for as long as possible.

3. Keep track of your funds and investments.

4. Switch from debt funds to equity-oriented funds after the stock market has been steady for some period.

5. Remain patient in case of unpredictable market fluctuations

6. Avoid switching funds during every high and low of the market.

7. To gain high returns, you must stay invested for the long term


Before investing in the policy, it is extremely important to have an in-depth understanding of the features of Unit-Linked Insurance Plans.

You can always choose the ULIP fund-switching technique in case of uncertainty, but make sure that for better and long-term gains, you do not practise it continually every time the market fluctuates.



Is switching in ULIP taxable?

With ULIPs, one can invest their premium in various debt and equity funds while also having the option to switch between different funds and do so tax-free. An insurance policy known as a ULIP invests the premium paid in securities such as debt, stock, or money market instruments.


What is an online ULIP fund switch?

A feature of your unit-linked insurance policy called fund switch allows you to move the funds that are currently connected to your policy to another fund of your choice. You might be charged in accordance with the terms and conditions of your policy after a specified number of switches.


What is the difference between fund switch and premium redirection?

A premium redirection, in contrast, to fund switching, does not alter the current structure of the sub-funds in your investment portfolio. It merely alters which sub-funds your future premium payments will be used to buy.

In this policy, the investment risk in the investment portfolio is borne by the policyholder.

Kotak e-Invest

Download Brochure


  • Return of Mortality Charges*$
  • Enhanced Protection
  • Multiple Plan Options
  • Zero Premium Allocation Charges
  • Tax Savings^

Ref. No. KLI/22-23/E-BB/521


- A Consumer Education Initiative series by Kotak Life

Similar Articles

What are loyalty additions, and how do they work in a ULIP?

Rate of Interest on Different Investment Plans in India

ULIP Plan as a Gift

ULIP Frequently Asked Questions (FAQ) - Kotak Life

Unit-Linked Life Insurance (ULIPs) vs. Term Insurance

6 Important Tips to Maximize Your Gains with ULIP Investments

What is ULIP Renewal?

4 Rules To Keep In Mind To Secure Your Child’s Future Financially

Top 5 Investment Options in 2022 for Healthy Returns

What is Equity Mutual Funds: Meaning, Types & Benefits

How to Manage Inheritance Money?

ULIP Tax Benefits: यहां निवेश करने पर मिलते हैं 5 बड़े फायदे

Benefits of ULIP as a Child Insurance Plan

ULIP Withdrawal Conditions - Before and After 5 years

How to Make Your Financial Portfolio?

ULIPs Investment – A Boon or Bane?

What is ULIP and Its Benefits?

Top 5 Principles That Need to be Followed for Wealth Creation

What is a Child Money Back Plan, and How Does it Work?

Got a Salary Hike? Here’s How to Plan your investment further

Difference Between Passive and Active Investing

How Can ELSS Funds Help You Save Tax & Create Wealth?

Savings Plan for Grandchildren

What is ULIP Plan, and How Does it Work?

5 Reasons Why ULIP Plans are One of The Best Retirement Planning Instruments

Best Investment Options to Cover Your Child's Education

Investment Options for NRIs in India

What is SIP Calculator, and How it Works?

What is Premium Redirection in ULIPs Plans | ULIP Insurance Plans | Kotak Life Insurance

What's Better for Your Child's Education? Child Plans or Mutual Funds?

How to Create Short-Term and Long-Term Wealth with ULIPs - Kotak Life

What are Some of the Safest Investment Options in India?

ULIP Investment Benefits You Must Know

How to Calculate Your ULIP Returns?

Importance of Portfolio Management

How is the Compound Annual Growth Rate (CAGR) Calculated in ULIP?

Know Why You Should Stay Invested in Your ULIP Plan

ULIPs: Suitable for all

Building wealth through regular investing

Best Investment Options in India in 2022

Develop an investing plan

Here's are the uses of ULIP your must be aware of

यूलिप प्लान में परिपक्वता लाभ क्या हैं: फंड वैल्यू सम एश्योर्ड या ओनली फंड वैल्यू?

Why Are ULIPs Called Flexible Investments?

Are Money Back Policies Helpful? A Complete Guide

यूलिप के फायदे और नुकसान क्या हैं?

Tax-Deferred Savings Plan: Overview, Benefits, Works

What is a Bond Fund and How It Works?

Why Do You Need A ULIP Plan - All You Need To Know

Can ULIP Policy be Transferred?

Know How to Invest at Every Age for Larger Returns

How to Apply for Death Claim Benefits in ULIPs - Kotak Life

Planning Financial Goals and Objectives of Financial Planning

Long Term Savings Plan - Best Savings Investment Plans in India

How and when should you exit from bad-performing ULIP?

How Can a Legal Nominee Claim ULIP Benefits are the Policyholder’s Death?

Factors Affecting Share Prices In The Stock Market

ULIP vs FD - Which is Better and Why?

How Safe is it to Invest in ULIP plans?

उच्च रिटर्न प्राप्त करने के लिए सर्वश्रेष्ठ इन्वेस्टमेंट विकल्प

Best Investment Plans For You To Invest In 2023

What are the Best Investment Options For Females?

Planning for Your Child's Higher Education? Explore These Investment Options

Why ULIP is Better Investment for Long-Term Wealth Creation?

How to Save Money from Salary?

Which is Better – FD, Mutual Fund, SIP, or ULIP?

Here's Whether You Should Link ULIP Plan with your Term Insurance

Best One-Time Investment Plans in India

Planning For Children's Future

How to Choose the Best ULIP Plans to Invest in 2022?

ULIP Benefits You Can Avail from Early Investing

Receiving regular payouts at various stages of life

ULIP As An Investment Option For Senior Citizens

What Is Financial Planning?

Can I Surrender My ULIP Policy after 2 Years?

Is ULIP A Good Investment Option?

Why Should You Build an Emergency Fund?

What are the Best Investment Options for Students in India?

8 Important Tips to Maximize Gains with ULIP Investments

What are Fixed Maturity Plans and Why Should I Invest in Them?

Which are the Best ULIP Plans in India for Children?

All you need to know about Fund Switching in ULIPs

Here's Myths on Investments in ULIP Plans

Difference Between Linked and Non-Linked Insurance Plans

What are the Maturity Benefits in a ULIP Plan: Fund Value Sum Assured or Only Fund Value?

What is Partial Withdrawal in ULIPs?

यूलिप में 8 शुल्क जो आपको अवश्य जानना चाहिए

How To Invest Money In ULIP?

Are Investment Returns Guaranteed in a ULIP?

Will You Need to Withdraw or Surrender Money From ULIP

Creating a second source of income with life insurance

5 Best Long Term Investments To Add To Your Portfolio in 2023

5 Reasons to Have a Child Education Plan

Understanding ULIP Risks: What are the Odds of Losing all my Money and Projected Returns?

What is Fund Value in ULIP?

How Is ULIP Different from Other Life Insurance Plans? Where Can I Invest - ELSS, ULIP, or PPF?

ULIP Plans Riders You Should Know About

5 Reasons to Buy ULIPS for a Financially Secured Future

Planning For Son or Daughter's Wedding

The lesser-known facts about ULIP policy that customers should be aware of?

First Job? Here are Some Tips on How to Manage Finances

Can You Have ULIP Plan and Health Insurance Plan Both?

Beginner's Guide to Wealth Creation: Meaning, Strategies, & Importance

What are the Best Short-Term Investment Plans with High Returns?

Why Should I Invest in ULIP?

All you need to know about claiming maturity proceeds from Ulip

What are Financial Assets & their types?

How Much Wealth Can You Create From ULIP in 10 years?

Asset Allocations in ULIP - Know the Top Benefits

Top ULIP Myths That You Must Stop Believing In

What is Lock-In Period in ULIPs?

How to Manage Your Portfolio Like a Professional?

How to Use Recurring Investment Strategies to Build Wealth?

Do You Know the Difference Between Savings and Investment?

Early Investing and the Power of Compounding

What are the Minimum and Maximum Investments in ULIP?

What Happens If I Stop Paying My ULIP Policy Premium After Paying the First Premium? Will I Still Get The Return?

What is Compound Interest, And How Do I Calculate it?

उच्च रिटर्न प्राप्त करने के लिए सर्वश्रेष्ठ इन्वेस्टमेंट विकल्प

What are ULIPs and their Types?

How Much Wealth Can You Create from ULIP in 10 years?

How to Start Saving Money in 10 Simple Ways?

Does Rupee Cost Averaging Work In Unit-Linked Insurance Plans?

Four Financial Lessons from The Vedas on Living Life to The Fullest

What are Index Funds, and How Do They Work?

Do ULIPs Give Good Returns On Investments?

What is Money Management? Definition & Example

Different Types of ULIP Investments in India

Here's Why it's a Good Time to Explore ULIPs as an Investment

How to Build a Strong Financial Foundation For the Future?

Is the surrender value of ULIP taxable?

How to Plan your Investment to Achieve Periodic Financial Goals?

ULIP policy: What happens when you stop paying ULIP policy premium during lock-in period

What is NAV in ULIP, and How is it calculated?

Learn About Safe Investments with High Returns in India

ULIP Plan or Traditional Insurance Plans - Which is better?

ULIP NAV - Everything You Need to Know

Difference Between Guaranteed Savings Plan and ULIP

वित्तीय संपत्तियां और उनके प्रकार

8 Charges in ULIP That You Must Know

Successful Financial Planning for Urban Women

What is the Time Value of Money (TVM)?

Difference Between ULIP and Endowment Plan?

How to Fix the 9 Most Common Financial Problems Your Family is Facing

Safe Investment Options with High Returns for FY 2018-19

Is This The Right Time To Invest In ULIP? Why or Why Not?

What Is Social Impact Investing and How Does It Benefit Society?

ULIP Vs Life Insurance Plan Know the Difference

Investments Options to Buy a house in India

Which is a Better Investment - Mutual Funds Or ULIP?

How to Cancel ULIP Policy?

How has ULIP Grown Over the Last 3 years?

ULIP Capital Gain Tax: Check Tax Norms for Capital Gain on ULIPs

Can NRIs Invest in ULIP Plans Offered in India?

How to Plan Your Child's Education - A Step-by-Step Guide

Learn About Safe Investments with High Returns in India

What are the things to consider before buying ULIPs?

Top 11 Investment Plans Available in India

यूलिप के फायदे (Benefits of ULIP in Hindi)

Best Investment Plans for Children - Secure Your Child's Future

Top 10 Investment Strategies to Create Wealth

Single Premium ULIP or a PPF - Which One is Better?

Endowment Plan vs Fixed Deposit?

How ULIPs can help you achieve your financial goals

What are the Best Investment Options for Beginners or Amateur Investors in India?

What is Direct Investment and its Types?

FAQs on Taxation of ULIPs

यूलिप और उनके प्रकार क्या हैं?

How Can ULIPs Help You Plan for Your Child's Future?

What is the Estimated Return Percentage on ULIP? Do Investors Get Compound Interest?

यूनिट लिंक्ड इंश्योरेंस प्लान में लॉयल्टी एडिशन कैसे काम करते हैं

Is ULIP a Complex Financial Product?

Are Gains from ULIP Sale Taxable?

What Is a Credit Score? Definition, Factors, and Ways to Raise It

How Do One-Time Investment Plans Work?

How to Increase Net Worth Along with Family Protection

Why Should You Invest in NPS?

What is Savings and the Importance of Saving Money

Is Life Insurance Investment Worthy Enough

How Can ULIP Plan be as an Investment for Your Child

Balancing Investment Between Risk and Return on Investments

What are the Best Investment Options for Young Adults?

ULIP Investment Strategy: Top Tips to Improve Your ULIP Gains

Why are ULIPs One of the Best Tax Saving Instruments?

How to Set Financial Goals for Your Future

What is a Savings Plan and What are is Benefits?

Can ULIP Help in Achieving Short-Term Financial Goals?

How Increasing Your SIP Every Year Helps You Reach Your Financial Goal Sooner?

Corporate Bonds: Meaning, Types & Benefits

What is Mutual Funds? | How Mutual Funds Work, Definition

Customising investments to manage your wealth

Can You Invest in Both Term Insurance and ULIP?

Why is Portfolio Diversification Important? How to Diversify Your Portfolio?

What are the Advantages and Disadvantages of ULIP?

Why ULIP Should Be a Part of Your Investment Portfolio?

Will AI be Your Future Financial Adviser? What Role Will Humans Play?

How To Track ULIP Performance?